When you consider that the yen has weakened by more than 1% today AND that US long rates are up 11 bps to 3.06%, it's almost remarkable that "gold" is only down $11 as I type. Just another day for you and me in paradise.
And I've inadvertently stumbled into what must be my theme for the day. Earlier, I posted a few items to Twitter. The first thing that caught my eye were these two items in my timeline. In our fiat world, they're definitely connected:
So this sent me off to the debtclock site to see just how close it shows the US to being at the $20T level. Ummm...pretty close:
And here's where this inadvertently connects back to Phil Collins and his song. It's not about "paradise" or even the metaphorical version in which I've applied it to today's price action in the paper metals markets. Instead, the song is about inequality and how so many folks simply look the other way. "I'm doing just fine so screw everyone else" is such a prevailing sentiment that it almost seems a natural part of the human condition.
But it is the debt and the fiat currency based system that has caused most of the inequality that we see. Rampant currency devaluation and debt issuance are the root cause of the widening gap between "the 1%" and everyone else. Again, referring back to the debtclock page (https://www.usdebtclock.org), here's a buried nugget that illustrates the point:
So, while "upper class"...who have access to both capital AND debt...have seen their "wealth" increase, the vast number of people at the lower end of the income range are getting absolutely crushed. Ever wonder why "The American Dream" is in peril? The chart above tells you all you need to know. Who can buy a house when incomes stagnate while price doubles? For that matter, who can educate their children, care for their parents and save for retirement in this system? And you wonder why there seem to be so many new apartment complexes being built...
This debt and fiat based system is killing us. The election of Trump was a problem in search of a candidate. He's not the solution. He's only the vessel that great numbers of the disenchanted and disenfranchised chose to support in a desperate hope for something different and something better. But he won't succeed (and his appointment of this Mnuchin character as SecTreas likely betrays his intentions anyway). In fact, NO ONE will succeed and NO CHANGE is possible UNTIL the current Keynesian, debt-based system finally dies.
Sadly, understanding all of this and implementing the necessary changes against the established forces is too much to ask of "the common/forgotten man". Instead, by far the most likely outcome is a total destruction of the capitalist/democratic state. Eventually it will be replaced by some sort of socialist tyranny that promises an egalitarian nirvana...and the downtrodden masses, uneducated and thus unwilling to think critically in opposition, will be marched into permanent dystopia.
(WHOA. That was pretty heavy for a Wednesday morning. Now back to your regularly scheduled morning post.)
As mentioned above, it almost feels like a victory that "gold" is only down $12 or 1% in the face of everything else today. As I type, the Long Bond is up 10 basis points at 3.05%. See below:
And the USDJPY is up (yen weaker) by 1.57 pints at 113.95. As you can see, that's two full points higher since just last evening. Yikes!
So for now, nothing has changed. Until and through the FOMC in two weeks, we must expect continued dollar strength (yen weakness), higher rates and weaker gold. The only thing that actually has my interest is silver which, in response to all of the surging base metal prices, is actually holding in there at $16.61. Again, the key lines to watch are the 100-week MA near $16.40 and critical horizontal support at $16.00. As long as silver remains above these two levels, the possibility of a late year rally back toward $18 remains.
OK, that's all for now. Have a great rest of your day and thank you for reading my lunatic rantings.